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(Bloomberg) – Twitter Inc. reported second-quarter sales that exceeded analysts’ estimates and gave current quarter forecasts that beat expectations amid global events such as the Olympics boosting publicity. Shares jumped about 5% in extended trading.
Revenue will rise from $ 1.22 billion to $ 1.3 billion in the period ending September, the San Francisco-based company said in a statement Thursday. Analysts were forecasting an average of $ 1.17 billion, according to data compiled by Bloomberg. Second-quarter sales jumped 74% to $ 1.19 billion from a year earlier, against analysts’ estimates of $ 1.06 billion.
Twitter added 7 million new users in the second quarter compared to the previous period, bringing the company’s total audience to 206 million daily users. These figures were in line with analysts’ estimates. The U.S. Twitter audience fell from 1 million users to 37 million during the period ended June 30.
A year ago, Twitter faced one of its toughest quarters when many brand advertisers began cutting their marketing budgets during the height of the pandemic. The social media company relies on brands for the bulk of its ad revenue, and sales fell 19% between April and June 2020. To expand revenue, Twitter has started pushing response advertising even more aggressively. direct – the types of ads that try to get specific results, such as an app install or a website visit.
The numbers suggest the business is growing after a chaotic year that included the pandemic and a U.S. election that ultimately led to Twitter permanently suspending then-President Donald Trump. While branded advertising has rebounded with the reopening of the global economy, the company remains the target of Trump allies who say the platform discriminates against Tories.
Twitter shares hit a high of $ 76.70 in extended trading after closing at $ 69.57. The stock has risen 28% this year.
Advertising the company’s branding can also help it avoid any major impact of Apple Inc.’s new privacy updates for iOS 14 users, which require companies to obtain permission from the company. user to collect certain data about their online activity. Most users ask apps not to follow them, which hurts targeted advertising, especially on Facebook.
Twitter, however, says it was not seriously affected by the update. “While it is still too early to assess the long-term impact of changes to Apple’s iOS 14.5,” the second-quarter effect “has been below expectations,” the company wrote in its letter to shareholders.
As ad revenue grows, Twitter’s share of the global market is not expected to increase, a sign of wider expansion of the advertising industry. Despite the good quarter and the company’s forecast, its global digital advertising market share is expected to remain at just 0.9% in 2021, according to EMarketer. Facebook, on the other hand, will capture around 24% of the global market.
Twitter gave an operating profit forecast for the current quarter of $ 50 million to break even and said annual expenses are expected to increase 30% from a year ago, compared to a previous growth estimate of 25%. Hiring, primarily among products and engineering, indicates the letter to the company’s shareholders.
(Updates to Twitter’s global advertising share in the ninth paragraph.)
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